GST ON BIO-FERTILIZERS: RAJASTHAN AAR DECIDES NIL RATE OR 5% BASED ON PACKAGING

BIO-FERTILIZERS UNDER GST: CLASSIFICATION, BRAND IMPACT, AND TAXABILITY- RHIZO ORGANIC ADVANCE RULING

RAJASTHAN AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Case Title :- Rhizo Organic

(GST AAR RAJASTHAN)

Advance Ruling No. RAJ/AAR/2018-19/04

Date of Judgement/Order- 16th June 2018

QUESTION ON WHICH ADVANCE RULING IS SOUGHT-

In order to seek advance ruling that, 

(i) Whether goods (Bio-Fertilizer or Organic Manure) are Exempt from GST or Not?

ISSUE TO BE DECIDED:-

Para No. 5. The issue involved in this case is that, Whether the Bio Fertilizer covered under the definition of Organic Manure (HSN code 3101) and What is the rate of GST applicable on Bio Fertilizer if it is not covered under Organic Manure (HSN Code: 3101)

FINDINGS AND ANALYSIS

Para No 6.2. As regard the classification of Bio-Fertilizers within the HSN Code 3101 as described in the Schedule I and Schedule Il of GST?

(A) Entry at HSN Code 3101 in the Schedule I of rate of GST on Goods, comprising of ‘List of Goods at NIL Rate’ states as below:-

     “All goods and organic manure other than those put up in unit container and,-(a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily, subject to the conditions as in the ANNEXURE I] “

(B) Entry at HSN Code 3101 in the Schedule IV of rate of GST on Goods, comprising of ‘List of Goods at 5% Rate’ states as below:-

   “All goods i.e. animal or vegetable fertilizers or organic fertilizers put up in unit containers and bearing a brand     name”

(C) The standard description of the HSN Code 3101 is as below:-

   “Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilisers produced by the mixing or chemical treatment of animal or vegetable products “

(D) Bio-Fertilizers are made of animals (micro-organisms) and hence covered within the standard description of the HSN Code 3101.

Para No. 7. Therefore the Bio-Fertilizers, other than those put up in Unit Container and bearing a brand name will covered under Schedule I of rate of GST on Goods and would attracts NIL rate of duty and if the Bio-Fertiliser is put up in Unit Container and bears a brand name, it would be taxable under GST @ 5%.

RULING

The goods (Bio Fertilizer or Organic Manure); other than those put up in Unit Container and bearing a brand name; will be covered under Schedule I of rate of GST on Goods and attracts NIL rate of duty & The goods (Bio Fertilizer or Organic Manure); put up in Unit Container and bearing a brand name, will be taxable under GST @ 5%.